STAG Industrial brings new deal; Summit, Goldman improve; AEP issues pop on redemption news

By Stephanie N. Rotondo

Portland, Ore., Oct. 26 - Preferred stocks ended Wednesday's session on a positive note on expectations that "something is going to get done in Greece soon," according to a trader.

"It was a seesaw day," another trader said. He added there was a "nice rally at the end of the day."

The new issue market continued to churn out deals, albeit small ones. STAG Industrial Inc. brought a $60 million issue of 9% preferreds after the market closed. Leading up to pricing, traders had not seen any markets in the name.

Summit Hotel Properties Inc.'s recently issued 9.25% preferreds were seen trading up, as were Goldman Sachs Group, Inc.'s 6.5% $25-par notes due 2061.

The preferreds of American Electric Power Co., Inc.'s subsidiaries were meantime heading upward. The company on Tuesday announced the upcoming redemption of all of the preferreds to the tune of $64 million.

Among domestic banks, Morgan Stanley's preferreds were trading actively, yet mixed. There was no news out on the investment firm.

STAG prices

STAG Industrial priced a $60 million issue of 9% series A cumulative redeemable perpetual preferreds on Wednesday.

Pricing came at the low end of talk, and the deal size was increased from a previously expected $50 million.

Traders saw no quotes in the grey market for the new paper.

Summit, Goldman gain

Summit Hotel Properties' 9.25% series A cumulative redeemable preferreds, moved up to $24.70 bid, $24.75 offered from previous levels around $24.65 in the grey market.

The $50 million issue priced Tuesday.

Goldman Sachs' 6.5% "baby bonds" - a $500 million issue that priced last week - was also inching up, closing at $24.90 bid, $24.95 offered.

AEP pops on call

American Electric Power said late Tuesday that seven of its subsidiaries will redeem all of their outstanding preferreds on Dec. 1. The 16 series of preferreds total $64 million.

A trader said there was "some trading" in the to-be-redeemed paper, all around the call prices.

"It could be a good sign that utility companies could be refinancing and getting some of their older debt off of their books," the trader said.

The 4.08% cumulative preferreds (Pink Sheets: OHIPP) of Ohio Power Co. moved up $36.10, or 53.91%, to $103.06. The call price is $103.00.

Ohio Power's 4.4% cumulative preferreds (Pink Sheets: OHIPN) were also higher, improving by $22.00, or 26.83%, to $104.00, also the call price.

The 4.5% cumulative preferreds (OTCBB: APPWM) issued by Appalachian Power Co. - which will be redeemed at $110.00 plus accrued dividends - gained $28.13, or 34.35%, to close at $110.00.

Indiana Michigan Power Co.'s 4.125% cumulative preferreds (Pink Sheets: IMIGO) moved up $19.56, or 22.61%, to $106.06. The call price is $106.125.

Morgan Stanley mixed

There was no news out to explain it, according to a trader, but Morgan Stanley preferreds were among the day's busiest securities.

The 6.25% capital securities (NYSE: MWR) moved up 4 cents to $21.48, while the 6.6% capital securities (NYSE: MSJ) fell 15 cents to $22.10.

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